BNY Mellon and Goldman Sachs settle agency lending transactions on HQLAx
20 July 2022 UK
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BNY Mellon and Goldman Sachs International have announced the completion of the first agency securities lending transactions using the HQLAx distributed ledger technology (DLT) platform.
HQLAx created ISIN-level securities trackers called Digital Collateral Records (DCRs), from loaned securities it received from BNY Mellon, giving Goldman Sachs a digital copy of those trades.
The ISIN-level DCRs are the first of their kind, according to BNY Mellon, representing specific ISIN quantities held in custody.
Those records enable holders and agents to transfer ownership of any security on the HQLAx distributed ledger, without the need for conventional settlement mechanisms.
Additionally, this will allow eligible clients to reuse ISIN-level DCRs in onward collateral obligations at one or more triparty agents.
The potential to enhance collateral and inventory mobility is very exciting and something that has been a key industry focus for a number of years, according to Bill Kelly, head of securities finance at BNY Mellon.
Commenting on the milestone, Amar Amlani, head of Europe, the Middle East and Africa digital assets at Goldman Sachs, says: “This represents another key step in our adoption of DLT to facilitate traditional financial activity in order to unlock efficiency gains across market participants. We are looking forward to growing volumes with our counterparts over the coming months.”
Guido Stroemer, co-founder and CEO of HQLAx, adds: “Agency securities lending activity represents the single biggest source of liquidity for the collateral upgrade market, so welcoming BNY Mellon as a liquidity provider to our platform represents a tipping point for recurring, scalable volumes on our platform.
“We are very proud to collaborate closely with strategic partners like Goldman Sachs and BNY Mellon to develop and implement innovative industry solutions like this one.”
HQLAx created ISIN-level securities trackers called Digital Collateral Records (DCRs), from loaned securities it received from BNY Mellon, giving Goldman Sachs a digital copy of those trades.
The ISIN-level DCRs are the first of their kind, according to BNY Mellon, representing specific ISIN quantities held in custody.
Those records enable holders and agents to transfer ownership of any security on the HQLAx distributed ledger, without the need for conventional settlement mechanisms.
Additionally, this will allow eligible clients to reuse ISIN-level DCRs in onward collateral obligations at one or more triparty agents.
The potential to enhance collateral and inventory mobility is very exciting and something that has been a key industry focus for a number of years, according to Bill Kelly, head of securities finance at BNY Mellon.
Commenting on the milestone, Amar Amlani, head of Europe, the Middle East and Africa digital assets at Goldman Sachs, says: “This represents another key step in our adoption of DLT to facilitate traditional financial activity in order to unlock efficiency gains across market participants. We are looking forward to growing volumes with our counterparts over the coming months.”
Guido Stroemer, co-founder and CEO of HQLAx, adds: “Agency securities lending activity represents the single biggest source of liquidity for the collateral upgrade market, so welcoming BNY Mellon as a liquidity provider to our platform represents a tipping point for recurring, scalable volumes on our platform.
“We are very proud to collaborate closely with strategic partners like Goldman Sachs and BNY Mellon to develop and implement innovative industry solutions like this one.”
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